BMW and Mercedes…an interesting partnership that many of us have not seen it coming years ago. In a discussion with Bloomberg, BMW announced that it is well on track to meet – and even exceed its goal of reducing spending on components and supplies by $5.2 billion by 2012, partly due to a partnership with the Stuttgart-based and old competitor, Mercedes-Benz.
“We can say that from today’s perspective we will certainly and easily reach the 4 billion-euro savings goal, and even significantly surpass it,” said Herbert Diess, the management board member responsible for the cuts.
Just days ago, BMW announced first-quarter net income of $417 million – surpassing the expected earnings of just $340 million. These profits represent an increase of $196 million compared to the same quarter in 2009.
The increase in profits came from strong sales of the new 7 Series, a highly profitable vehicle according to BMW officials. An important part of costs savings came from the prosperous partnership with Mercedes.
The two German rival luxury car companies are working hand in hand to cut costs and talks between BMW and Mercedes have yielded new projects over the past several months that will help each company reduce spending by about 100 million euros a year by 2012.
In the past, Mercedes-Benz and BMW have discussed many times about possible partnerships and plans to share research and manufacturing in order to cut costs during the financial crisis. The two companies were already developing together hybrid power units and conducting joint purchasing of components.